American Petroleum Institute Partnership Proposal — Technology-Enhanced Carbon Integrity

Executive Summary

The American Petroleum Institute (API), representing over 600 oil and gas companies, is at the forefront of advocating for market-based solutions to address climate change while ensuring energy security. As the industry transitions towards a low-carbon future, it is imperative to leverage advanced technologies that enhance the integrity of carbon markets. DaedArch Corporation proposes a strategic partnership to implement a sensor-based Monitoring, Reporting, and Verification (MRV) platform that aligns with API's priorities, including support for Carbon Capture and Storage (CCS) and Carbon Capture, Utilization, and Storage (CCUS) technologies, as well as the promotion of natural gas as a transition fuel.

Our MRV platform provides ground-truth sensor data that enhances carbon credit integrity through continuous monitoring, automated reporting, and transparent verification chains. By integrating DaedArch's capabilities with API’s advocacy for market-based carbon pricing and technology development, we can create a robust framework for carbon credit verification that supports the industry’s transition while maintaining energy security.

Value Proposition

Enhancing Carbon Credit Integrity

The credibility of carbon credits is paramount for market-based pricing mechanisms. DaedArch's sensor-based MRV platform offers:

• Continuous Monitoring: Real-time data collection ensures that emissions reductions are accurately tracked, fostering trust in carbon credits.
• Automated Reporting: Streamlined reporting processes reduce administrative burdens and enhance efficiency, allowing companies to focus on core operations.
• Transparent Verification Chains: Our technology provides an auditable trail of data that can withstand regulatory scrutiny, essential for the integrity of carbon markets.

Supporting API's Advocacy for CCS and CCUS

The partnership will support API's commitment to CCS and CCUS technologies by:

• Providing empirical data that demonstrates the efficacy of CCS projects, thereby attracting investment and regulatory support.
• Enhancing the operational efficiency of CCS facilities through real-time performance monitoring, leading to lower costs and improved outcomes.

Promoting Natural Gas as a Transition Fuel

Natural gas plays a critical role in the energy transition, serving as a bridge to a low-carbon future. The DaedArch platform can:

• Monitor emissions from natural gas operations, ensuring compliance with environmental standards and enhancing public trust.
• Provide data-driven insights to optimize the use of natural gas in conjunction with renewable energy sources, showcasing its viability as a transition fuel.

Economic Benefits

The integration of DaedArch's MRV platform can lead to significant cost savings and revenue generation for API members:

• Cost Reduction: By automating reporting and verification processes, companies can reduce their operational costs associated with compliance.
• Revenue Generation: Enhanced carbon credit integrity can lead to increased demand for credits, creating new revenue streams for companies engaged in CCS and CCUS.

Partnership Model

Collaborative Framework

The partnership will operate under a collaborative framework that emphasizes shared goals and mutual benefits:

• Joint Development: API and DaedArch will jointly develop tailored solutions that meet the specific needs of API members, focusing on enhancing carbon credit integrity.
• Knowledge Sharing: Regular workshops and seminars will facilitate knowledge exchange on best practices in carbon management and technology implementation.
• Pilot Projects: Collaborative pilot projects will be initiated to demonstrate the effectiveness of the MRV platform in real-world scenarios.

Governance Structure

A governance structure will be established to oversee the partnership:

• Steering Committee: Composed of representatives from both API and DaedArch, this committee will guide the partnership's strategic direction and ensure alignment with industry needs.
• Technical Advisory Group: A group of experts will provide technical guidance on the implementation of the MRV platform, ensuring that it meets industry standards and regulatory requirements.

Pilot Program

Objectives

The pilot program aims to:

• Demonstrate the capabilities of DaedArch's MRV platform in real-world applications.
• Validate the technology's effectiveness in enhancing carbon credit integrity.
• Gather data to inform broader implementation strategies across API member companies.

Scope

The pilot program will focus on a select group of API member companies engaged in CCS and natural gas operations. Key components will include:

• Site Selection: Identify sites with existing CCS initiatives or natural gas operations for pilot implementation.
• Data Collection: Deploy DaedArch's sensors to collect baseline emissions data and track reductions over time.
• Performance Metrics: Establish key performance indicators (KPIs) to measure the success of the pilot, including accuracy of emissions data, cost savings, and efficiency improvements.

Implementation Steps

1. Kick-off Meeting: Align on objectives, timelines, and roles.
2. Site Assessment: Conduct assessments of selected pilot sites to determine specific needs and challenges.
3. Technology Deployment: Install DaedArch's sensor-based MRV platform at pilot sites.
4. Data Monitoring: Begin real-time data collection and monitoring.
5. Reporting and Analysis: Generate automated reports and analyze data for insights.
6. Review and Adjust: Conduct regular reviews to assess progress and make necessary adjustments.

Timeline

The proposed timeline for the partnership and pilot program is as follows:

• Month 1-2: Partnership formalization and governance structure establishment.
• Month 3: Kick-off meeting and site selection for pilot program.
• Month 4-5: Site assessments and preparation for technology deployment.
• Month 6: Deployment of the MRV platform at pilot sites.
• Month 7-12: Data monitoring, reporting, and analysis.
• Month 13: Review of pilot program outcomes and recommendations for broader implementation.

Commercial Terms

Investment and Cost Sharing

To ensure the success of the partnership, the following commercial terms are proposed:

• Initial Investment: API members will contribute to the initial investment required for the deployment of the MRV platform, with costs shared among participating companies.
• Revenue Sharing: A revenue-sharing model will be established for carbon credits generated through the pilot program, incentivizing participation and collaboration.
• Subscription Model: Following the pilot, a subscription model will be introduced for ongoing access to the MRV platform, providing continuous monitoring and reporting capabilities.

Performance Metrics

Success will be measured against predetermined performance metrics, including:

• Accuracy of emissions data captured by the MRV platform.
• Cost savings achieved through automated reporting and verification.
• Revenue generated from carbon credits attributable to the pilot program.

Exit Strategy

In the event that the partnership does not meet its objectives, an exit strategy will be defined, allowing both parties to disengage with minimal disruption.

Conclusion

The proposed partnership between the American Petroleum Institute and DaedArch Corporation represents a strategic alignment of interests that can significantly enhance carbon credit integrity while supporting the industry's transition to a low-carbon future. By leveraging DaedArch's advanced MRV technology, API members can strengthen their market position, enhance compliance, and contribute to a more sustainable energy landscape.

We look forward to discussing this proposal further and exploring how we can work together to achieve our shared goals. Thank you for considering this opportunity to advance the energy transition through technology-enhanced carbon integrity.